ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The demand (or marginal benefit) curve is downward-sloping to reflect the fact that people will pay less for additional units of a good as they consume more of it.

Detailed explanation-2: -The marginal cost curve is generally upward-sloping, because diminishing marginal returns implies that additional units are more costly to produce.

Detailed explanation-3: -If consumers are the only group deriving benefit from a commodity, then the demand curve is the marginal social benefit curve. Marginal social benefit is the benefit society receives when an additional unit of a commodity is produced.

Detailed explanation-4: -Marginal benefit is the maximum amount a consumer will pay for one additional good or service. Marginal benefit generally decreases as consumption increases. Marginal cost of production is the change in cost for making one additional good or incremental unit of service.

Detailed explanation-5: -In practice, marginal cost curves often slope downward as a firm increases its production from zero up to some low level. This initial downward slope occurs because a firm that employs only a few workers often cannot reap the benefits of specialization of labor.